TLAR: According to Dr. Sami al-Araji, the chairman of the National Investment Commission (NIC), Iraq needs up to $1 trillion over the next 10 years to rebuild its crumbling infrastructure and battered economy.

But the question looms: How can the government of Iraq mobilize such gigantic sums of money and build its capacity to execute such a large budget for infrastructure investments

Its population, currently 32 million, is forecasted to increase by over 3 percent annually, which will create a larger number of future consumers. Its gross national income (GNI) per capita, currently $2,640, is estimated to grow by around 10 percent per year on average. Spending power is expected to grow rapidly....Read More Link On Right

In order to service this large future market, foreign commercial activities have skyrocketed from around $3 billion in 2007 to nearly $60 billion in 2011. In other words, the amount is twenty times larger than four years ago. Although risks still remain, the security situation has been generally improving, compared with the most chaotic period from 2006 to 2007. The oil price, hovering at a relatively high level, is also contributing to the expansion of Iraq’s economy. The Iraqi government’s budget for 2012 assumed that oil would be sold for $85 per barrel, but the current market price is over $100. To date, Iraq is achieving a relatively strong performance of oil production and export. Recently, Iraqi oil production reached over 3 million barrels per day. That figure is higher than Iran’s production, and Iraq has now become the second biggest oil producer among the Organization of the Petroleum Exporting Countries (OPEC), just behind Saudi Arabia. FULL ARTICLE & LINK BELOWHOUND1: Thanks Bob and tlar, for this usefull information. As to Iraq needing $1 trillion ovr the next 10 years. It seems to me from what read about Iraq that maliki and the GOI do not want to see the infrastructure and economy built-up or advanced in any capacity.

I have much talk about the need. Request for more funds to help accomplish these task however no action to build the economy or infrastructure. Can we expect this to change?WGW242: Not as long as the pimp[Maliki] and his whores[almost the entire government] are in power. Only the people can change this, and they are so fractured that chance is slim. I do not mean to be negative, but nothing really seems to change other than the BS in their news, and way too many so called "Guru's" opinions. JMHO TLAR: hound1, Iraq is totally corrupt. They have the resources to accomplish anything and would have the support from the international community rebuilding their infrastructure if they just played strait. Unfortunately they are the most corrupt government in the Middle East. To do business in Iraq you have to grease many palms. The problem is that too many of the funds intended for projects are siphoned off to line the pockets of the same people who are charged to do the projects. As one example, since 2003 Iraq has poured billions and billions into building enough power plants to provide electricity to their people. The money is gone , there is still very little electricity. Phony contracts, false purchases, missing funds and out right theft have all been proven. Maliki stands between justice and these crooks, protecting them. Even Maliki's son has stolen funds but is not being prosecuted. Maliki is running Iraq as a mafia leader would run his organization. He provides protection for what we must assume, is his piece of the action. Anyone and everyone in Iraq can be bribed. Witness the 183 judges that have taken bribes to produce results that Maliki wants on court cases. The heads of the judicial system does not prosecute or call these judges out, Why? Because they are probably taking bribes themselves from Maliki. The Iraqi government owns 100% of the oil industry. Which in a sense means Maliki controls 100% of Iraq's incoming revenue. Human nature tells us that money and power corrupts. Maliki is in control of so much money that he can bribe anything he wants done. He can also have anyone in Iraq killed and he has done so. He has been accused publically of killing the mayor of Mosel but there has never been any formal charges. The leaders of the opposition blocks are weak and also corrupt. All have become very rich since Iraq was invaded in 2003. They don't truly appear to have the will or the desire to stand out and point fingers at the government or take a real leadership role because IMO, they are as guilty of corruption as is the government. Only the people can put a stop to this through an Arab spring. If not, and if something is not done to remove Maliki and his mafia, this investment might be quite some time before it comes to fruition. FULL ARTICLE & LINK: 09/02/2013 The Iraqi Economy’s Huge Potential By Takema Sakamoto Takema SakamotoTakema Sakamoto, Chief Representative of the Japan International Cooperation Agency (JICA) Iraq Office. Based on its rich natural resources and huge market potential, Iraq’s economic prospects seem promising. Its population, currently 32 million, is forecasted to increase by over 3 percent annually, which will create a larger number of future consumers. Its gross national income (GNI) per capita, currently $2,640, is estimated to grow by around 10 percent per year on average. Spending power is expected to grow rapidly. In order to service this large future market, foreign commercial activities have skyrocketed from around $3 billion in 2007 to nearly $60 billion in 2011. In other words, the amount is twenty times larger than four years ago. Although risks still remain, the security situation has been generally improving, compared with the most chaotic period from 2006 to 2007. The oil price, hovering at a relatively high level, is also contributing to the expansion of Iraq’s economy. The Iraqi government’s budget for 2012 assumed that oil would be sold for $85 per barrel, but the current market price is over $100. To date, Iraq is achieving a relatively strong performance of oil production and export. Recently, Iraqi oil production reached over 3 million barrels per day. That figure is higher than Iran’s production, and Iraq has now become the second biggest oil producer among the Organization of the Petroleum Exporting Countries (OPEC), just behind Saudi Arabia. In addition, oil export facilities in Basra have been completed or are approaching completion. Recently, Iraqi oil exports amounted to approximately 2.6 million barrel per day. Thus, the Iraqi government is receiving oil revenues to fund its budget as expected. Taking into account all of the above, Iraq is deemed as one of the world’s economies with the highest growth potential today. The Fragility of the Iraqi Economy However, at the same time, it is critical to underscore that Iraq’s prosperity is not predetermined, and the country is now at a crossroads. Enormous budgets for investment, especially for infrastructure, are essential, but the Iraqi government in recent years has faced growing budget deficits. (For example, at the time of drafting each year’s budget, the deficit was envisaged at approximately $13 billion for 2011, $15 billion for 2012, and $19 billion or more for 2013.) According to Dr. Sami al-Araji, the chairman of the National Investment Commission (NIC), Iraq needs up to $1 trillion over the next 10 years to rebuild its crumbling infrastructure and battered economy. But the question looms: How can the government of Iraq mobilize such gigantic sums of money and build its capacity to execute such a large budget for infrastructure investments? The volatility of oil prices needs acute attention, too. As we have observed, Iraq has enjoyed the high price of oil recently, but the price fluctuates. In 2009, Iraq had a bitter experience due to the sudden and rapid depreciation of oil prices. The economy suffered severe damage, and the Iraqi government was forced to seek emergency financial support from the International Monetary Fund (IMF) and the World Bank. In addition, oil dependent economies often face their own unique challenges, such as ‘Dutch disease’ (the decline in competitiveness of non-oil tradables following real exchange rate appreciation caused by the rapid infusion of new income into the country) and ‘the resource curse’ (poor economic governance and management because governments are heavily dependent on resource revenues rather than on taxes from citizens, resulting in a weak chain of accountability between citizens and governments). In short, Iraq’s reliance on oil revenues can be seen as both a blessing and a curse. A report compiled by the U.S. Agency for International Development (USAID) for the Iraq Prime Minister’s Advisory Commission (PMAC) in October 2012 clearly warned that over-dependence on oil revenues has the potential to create significant economic and market distortions.

Oil wealth may hit non-oil exports as a result of exchange rate valuation. Furthermore oil wealth may mask costly economic inefficiencies, including an oversized public sector, and it can create distortions and perverse incentives. The report dared to state that Iraq’s growth path is on a dangerous trajectory that has significant political, economic and societal risks. Iraq’s Struggle for Private Sector Development and Economic Diversification Beyond the oil sector, the Iraqi government is struggling to attract private sector investment and to diversify its economy by promoting sectors such as agriculture. Currently, Iraq is ranked 165 among 185 countries and economies in the World Bank’s ‘Doing Business’ report, which assesses economies in 10 areas of business regulation.

If one considers other factors not included in the report (such as service delivery on the ground, security constraints and corruption), Iraq’s ranking might be even lower. It is also worthwhile noting that Transparency International’s 2012 corruption perceptions index ranked Iraq at 169 among 174 countries, although the Iraqi government has complained about the ranking in the past. In order to promote sustainable development, the Iraqi government must take steps to improve its business environment in order to attract reputable foreign companies. Revitalizing the private sector and attracting foreign investment is also crucial from a job creation perspective.

Iraq’s unemployment rate, which is calculated at 16 percent in total, is over 35 percent for youth. Employment opportunities are needed to avoid social disruption and to offer economic prospects. And the necessity of economic diversification is also apparent when one takes into account the risks of oil dependent economies mentioned above, such as ‘Dutch disease’ and ‘the resource curse.’ Job opportunities in the oil sector are limited. So what is the most promising sector other than oil? Many believe that the agricultural sector holds the greatest potential for broad-based growth. There are many reasons why agricultural sector shows promise, including its job absorption capacity, current GDP share, the importance of rural development to reduce economic inequality, and the significance of food security in the MENA region.

Also, one must not forget Iraq’s shining history in agriculture, as part of the Fertile Crescent and mankind’s first bread basket. Hence, the agricultural sector is a good place to start to encourage economic diversification. International Partnership’s Role to Support a Brighter Future for Iraq In Iraq, the Japan International Cooperation Agency (JICA), the Japanese government’s agency in charge of supporting developing countries, has been acting as a close partner to the government. To stimulate foreign direct investment and support private sector development, JICA has been working to improve the business environment, through the provision of soft loans and various advisory services.

The main business obstacles can be attributed to a shortage of infrastructure and institutional/ human capacity, as well as a lack of internationally standardized business procedures. Belated payments along with vague bidding and contracting operations are the biggest risks pointed out by many private companies. JICA has also been working jointly with the Iraqi government on economic diversification, especially in the field of agriculture. In dry parts of the country, effective water usage remains the most critical issue.

To address this challenge, the establishment of water users associations, promotion of water-saving irrigation, and rehabilitation of devastated irrigation systems are required. In this context, JICA has provided advisory services, such as sharing know-how on both technical and management skills, and physical support for the procurement of goods and construction of irrigation systems to assist the Iraqi government. Iraq remains an important player in the global economy. Both in terms of its contribution to world energy markets and its role in the Middle East, the international community has a vested interest in seeing Iraq succeed. While the country faces significant challenges, these obstacles must be tackled collectively, with support from the international community, to build a brighter future for Iraq and the world. http://www.asharq-e.com/news.asp?section=2&id=32845

Lucky B

2/10/2013 09:49:55 am

corruption , bribes , having peole Killled ,. greasing plams , pay offs ,
Bacl alley dealings , exctra exctra exctra . are you guys talking about Iraq or America . many things happened when a young
America was just comming into the industrial age , and creating a great infratructure as you speak of Iraq being to corrupt to do so and this one or that one dont want it , just no i wont say just . many things happened the same way here as it will over there . to get where you want to get to takes hard work and millions of dollars
and money talks . everyone know the sound of money . and if your gonnb a play your gonna pay , been like that since money has been around , gold and silver as well . you have to buy this or that . be it a vote be it a license , to make this go threw faster . is gonna cost money , go into a restraunt that is full and the materd , tell you no seats are available . sllip him 50 or a 100 bucks and see how fat a seat fr two can open . the game is played the same all over the workld some call it a bribe but our goverment will tel youb its busssiness , same with , goverment contracts , to clearing a paith for things a goverment wants done . hey question did they ever find the ones that assinaited Dina ??? bet they never will either . but thats what im talking about